We have written and spoken about the absolute lunacy of selling “as-is” and “where-is” and not allowing any previews of the property. We have also written about selling property and allowing returns and/or exchanges if it’s not as described.
First, let’s define some terms here:
Express warranties are statements of fact and/or promises that the property will conform to the statements or promises, factual description of the property, or a sample or model that is used to express conformity. Such express warranties cannot be disclaimed with an “as-is” transaction.
Implied warranties are bidder/buyer justifiable assumptions of merchantability or fitness for a particular purpose. Such implied warranties can be disclaimed with an “as-is” transaction.
If you as an auctioneer express any warranties by words, expressions, pictures, video, or otherwise, you are held to those expressions. If the property doesn’t conform to those expressions, the buyer can expect to have the option to return the property for a refund.
Bidders/buyers have a right to assume property conforms to certain merchantability and/or fitness for a particular purpose and the same recourse is available. However, if you sell “as-is” (and possibly “where-is”) then you would not be held to any implied warranties. Yet, you would have to provide bidders a reasonable opportunity to preview to avoid recourse.
Indeed these are basically the two choices for auctioneers who expressly describe or otherwise sell property at auction. Auctioneers can sell “as-is” with being held to any expressed warranties but not be held to any implied warranties.
For instance, if an auctioneer is selling a grandfather clock and merely says, “You’re buying this grandfather clock — ‘as-is'” then as long as it is actually a grandfather clock (expressed warranty) along with “as-is” it could be working, chiming and otherwise up-to-spec … or not (implied warranties.)
In this above scenario, if the buyer got it home and it wasn’t actually a grandfather clock, he has recourse. If the buyer got it home and it didn’t work, he likely has no recourse.
Let’s change our story a bit. Auctioneer is selling a grandfather clock and says “You’re buying this grandfather clock which keeps great time — ‘as-is'” then as long as it is actually a grandfather clock and keeps great time (expressed warranties) along with “as-is” it could chime properly … or not (implied warranties.)
In this above scenario, if the buyer got it home and it wasn’t actually a grandfather clock or didn’t keep great time, he has recourse. If the buyer got it home and it didn’t chime, he likely has no recourse.
As we noted previously, Attorney at Law Richard Stim notes that selling “as-is” with no opportunity to inspect results in the buyer having the right to complain — as in expect some actions to address his damages: https://mikebrandlyauctioneer.wordpress.com/2020/05/12/as-is-and-the-right-to-inspect/
Many auctioneers tend to think that “as-is” (and “where-is”) avoids any warranties expressed or implied. A good rule to remember is anything you say you can be held to, but almost anything implied can be disclaimed by an “as-is” statement.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and America’s Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.
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